Is Pushdown Accounting Lifting You Up?

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In this article, the authors provide a review of the Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) No. 2014-17, Business Combination (Topic 805): Pushdown Accounting, a Consensus of the FASB Emerging Issues Task Force. This article addresses issues on “pushdown” accounting by contrasting the new guidelines with the existing practices and discusses considerations and strategies on how to handle this new accounting standard. Before this Update, the use of “pushdown” accounting to account for business combinations was prohibited under certain circumstances and required under the others. The Update not only gives guidelines on the treatments of pushdown accounting but also streamlines the application of such accounting practice.